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Republicans considering whether or not to back U.S. President Donald Trump's healthcare reforms in a crucial House of Representatives vote this week face a painful choice.

If they vote against, they could face the wrath of a vengeful and combative president. If they vote for it, they risk retribution from the billionaire brothers Charles and David Koch and other powerful right-wing players whose money can be pivotal in re-election races.

As Trump faces the most formidable, high-stakes negotiation of his presidency, the fierce battle in the U.S. Congress over his plan to replace Obamacare is a test of whether Republicans will trust him with their political futures at the risk of alienating deep-pocketed conservative advocacy groups.

As Trump and leaders in the House round up support for the bill ahead of a planned Thursday vote, some groups are threatening to retaliate against those who do support it, including the Club for Growth, the Heritage Foundation's political arm, and Americans for Prosperity, which is part of the expansive political pressure network established by the Koch brothers.

All three groups are “keying” the vote, which means it will be a factor in determining whether the groups deem a lawmaker to be sufficiently conservative. That opens up the possibility that some Republicans who vote in favor of the bill could face a primary challenge in next year’s congressional elections and may not be able to count on help from the Kochs and others.

Trump himself warned House Republicans in a meeting on Tuesday that their seats will be at risk next year if they do not support his healthcare bill, which would modify but not eliminate Obamacare, formally known as the Affordable Care Act, Democratic former President Barack Obama's signature healthcare legislation passed in 2010.

“He warned us that there are consequences if we don’t come together for us as a party and also for individuals,” Representative Richard Hudson of North Carolina said after the meeting. “He wasn’t threatening in any way. He was just giving us a pretty clear warning.”

Trump also told Representative Mark Meadows of North Carolina, an outspoken critic of the bill, that he was "coming after" him, according to people in the meeting. Meadows later said the president was joking.

'OUTSIDER' JOINS ESTABLISHMENT

Some Conservatives believe the bill does not go far enough in dismantling Obamacare and have not been satisfied by the White House’s attempts to mollify them. NBC News reported on Tuesday that 26 House Republicans oppose the bill, which would leave House Speaker Paul Ryan short of the 216 votes he needs. No Democrat is expected to support the bill.

The conflict has created an odd dynamic: Trump, who ran as an “outsider” candidate siding with the Republican political establishment against the hard-line conservatives who were some of his most ardent supporters.

At the same time, Trump has never been a favorite of libertarian conservatives such as the Kochs, or of groups such as the Club for Growth, because, among other things, he has never taken a strong stand on reining in federal spending. They opposed him during the Republican presidential campaign.

For them, the healthcare vote is a test of their continued relevance in a party seized by Trump.

The Koch network spent an estimated $250 million on last year’s election. The Koch-run Americans for Prosperity, which has chapters in more than 30 states and boasts that it can deploy 3.2 million citizen activists, spent almost $14 million on the 2016 elections, according to federal records. Freedom Partners, another Koch entity which largely targeted Democrats with attack ads, spent $30 million.

Tim Phillips, president of Americans for Prosperity, would not say directly that Republicans who support the bill will face consequences next year, but noted, “Members of Congress know how serious we take a vote like this.”

James Davis, a spokesman for Freedom Partners, said “network organizations will stand with principled lawmakers who will oppose the House healthcare proposal.”

Davis said the Koch network would spend between $300 million and $400 million ahead of the 2018 elections.

novartis

 

Novartis's heart failure drug serelaxin flopped in a late-stage trial by not cutting cardiovascular death or slowing disease progression, marking the likely demise of a drug hopeful the Swiss firm had promoted as a potential blockbuster.

The company's shares fell as much as 2.2 percent following the announcement on Wednesday, as analysts began downgrading their long-term revenue estimates.

The failure will put pressure on Novartis to ramp up sales of its Entresto heart failure drug that has got off to a slow start, analysts said.

Serelaxin had a troubled trial history, having already failed in 2014 to win the approval of European and U.S. regulators. Novartis pressed on in the hope of eventually gathering enough evidence to change regulators' minds, but Wednesday's announcement that the drug failed dashes those aims.

"We are disappointed this study did not confirm the efficacy of RLX030," said Vas Narasimhan, Novartis's drugs development chief, adding he will continue to analyze the results to help determine where serelaxin went wrong.

With the failure, Novartis's stable of potential new blockbusters has now been trimmed to 12 medicines.

Serelaxin was originally seen as a way for Novartis to fill the gap left by expiries on heart drugs such as Diovan, which lost U.S. patent rights in 2012.

An open submission to the FDA is now likely to be put on ice after Novartis said on Wednesday after its RELAX-AHF-2 phase III study did not meet its target of reducing cardiovascular deaths or worsening heart failure in patients with acute heart failure when added to standard therapy.

"This is a major disappointment: we viewed Serelaxin as one of the major sources of upside to our long-term Novartis estimates," said one Zurich trader, who estimated the drug could have had 2 billion Swiss francs ($2.01 billion) in sales by 2020.

Acute heart failure is a medical emergency where patients become short of breath as the heart struggles to pump blood.

The condition is a major cause of hospitalization for people over 65, with around one in five patients not surviving the year following hospitalization.

Serelaxin was meant to relax blood vessels to ease the burden on the heart.

Analysts said the drug was always a risky proposition, given its previous stumbles with regulators.

"The failure of serelaxin will refocus the importance of Entresto to meet consensus long-term sales expectations as well as the importance for management to bolster its pipeline," Deutsche Bank analyst Tim Race wrote in a note to investors.

(Reporting by John Revill, additional reporting by Ruppert Pretterklieber; editing by Brenna Hughes Neghaiwi and Louise Heavens)

President Donald Trump tried to rally Republican lawmakers behind a plan to dismantle Obamacare on Tuesday as U.S. stock markets showed their worst one-day performance since the November election.

Trump is trying to win the first major legislative battle of his presidency. Pressure is growing on the businessman-turned politician to deliver as investors become worried that a failed healthcare push could also portend trouble for promised tax cuts and relaxed regulation that have propelled the market to record highs in recent months.

In one of the few visits he has made to the U.S. Capitol since taking office two months ago, Trump told fellow Republicans in the House of Representatives on Tuesday morning they would face "political problems" for opposing the bill that takes apart Obamacare and partially replaces it. Later in the day, Trump hosted roughly a dozen lawmakers in the Oval Office to listen to their concerns.

"The president was really clear: He laid it on the line for everybody," House Speaker Paul Ryan, the leading proponent of the bill, told reporters. "We made a promise. Now is our time to keep that promise. ... If we don't keep our promise, it will be very hard to manage this."

The S&P 500 and Dow Jones Industrial Average lost over 1 percent in their worst one-day performances since before Trump's election victory on Nov. 8. The S&P financial index sank 2.87 percent, its biggest daily fall since June.

“You have this back and forth in Congress with the new healthcare plan and you have this belief that if the healthcare plan can’t pass, then they can’t move on to taxes. There’s this feeling that if things don’t get done, then maybe what the market has been anticipating gets held up," said Mark Kepner, managing director at Themis Trading in Chatham, New Jersey.

Some conservative lawmakers believe the healthcare bill does not go far enough, while moderate Republicans worry that millions of Americans will be hurt by the dismantling of the 2010 Affordable Care Act, Democratic former President Barack Obama's signature healthcare legislation. (For a graphic on how U.S. healthcare stacks up under the ACA and AHCA

Party leaders hope to move the bill to the House floor for debate as early as Thursday. But the administration and House leadership can afford to lose only about 20 Republican votes or risk the bill failing since Democrats are united against it.

Republican Representative Mark Meadows, chairman of the conservative House Freedom Caucus, said the roughly three dozen members have decided not to vote as a bloc. As many as 21 currently plan to vote no on the legislation, according to a CNN report.

Republican Representative Walter Jones said Trump told lawmakers in the closed-door meeting at the Capitol that if the Republican bill does not pass, they would face "political problems." Jones said he thought Trump meant lawmakers could lose their seats.